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Putting the Structure in Decision Making

Supply chain decision making is fraught with difficulties, largely because decision making frequently is regarded purely as a mental process in which there is an illusion of knowledge. Supply chain
managers rely too much on guts and intuition, the authors contend, and not enough on structure and information. They offer seven steps to improving that problem in your supply chain.

By William B. Lee and Errol Wirasinghe ·
May 7, 2010

Many supply chain managers make the critical error or equating making decisions with solving problems. Decision making is not problem solving. Decision making is specific to the person. Problem solving is specific to the problem. Our work suggests that problem solvers are not necessarily the best decision-makers, and perhaps vice versa.

We have all heard the jokes liked “to a surgeon, cutting can fix anything” or “to a chiropractor, manipulation can fix anything” or “to a psychologist, everything’s mental.” These jokes are, of course, not fair to those professionals, particularly the good ones. But don’t we have the same kind of =phenomenon with our supply chain decision making? Some will advocate that “lean can fix everything” or hat “everyone needs to do Six Sigma.”

Again, we don’t want to criticize the advocates of those techniques, just as we don’t want to disparage surgeons or chiropractors of psychologists. It’s just that we need to take a longer, more analytical look at our supply chain decisions and not simply jump in with the latest buzzword. We believe one of the reason companies have so much trouble with their supply chains is a lack of structured decision-making process…We offer seen steps to a more structured approach to supply chain decision-making.

Many supply chain managers make the critical error or equating making decisions with solving problems. Decision making is not problem solving. Decision making is specific to the person. Problem solving is specific to the problem. Our work suggests that problem solvers are not necessarily the best decision-makers, and perhaps vice versa.

We have all heard the jokes liked “to a surgeon, cutting can fix anything” or “to a chiropractor, manipulation can fix anything” or “to a psychologist, everything’s mental.” These jokes are, of course, not fair to those professionals, particularly the good ones. But don’t we have the same kind of =phenomenon with our supply chain decision making? Some will advocate that “lean can fix everything” or hat “everyone needs to do Six Sigma.”

Again, we don’t want to criticize the advocates of those techniques, just as we don’t want to disparage surgeons or chiropractors of psychologists. It’s just that we need to take a longer, more analytical look at our supply chain decisions and not simply jump in with the latest buzzword. We believe one of the reason companies have so much trouble with their supply chains is a lack of structured decision-making process…We offer seen steps to a more structured approach to supply chain decision-making.

If history is our guide, economies take a turn every nine years. Yet time and again, a strong business cycle and fading memories convince us the good times will go on forever. Ten years after the great recession, we surveyed 100 manufacturing firms to find out if businesses are ready to fight through the next recession.

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